Thursday, September 2, 2010

Behind the Curtain: Communications in the Acquisition Process

With the end of the fiscal year comes the right of passage for government contracting personnel and contractors alike; the end-of year budget dump or as I like to call it, the end of fiscal year feeding frenzy. This time of year is characterized by the worst practices in federal contracting: lack of any real acquisition planning, abundance of improperly justified sole-source contracts, and the overall lack of meaningful competition.

Coming off the heels of a new report by GAO on the lack of competition, one clear issue is the woefully inadequate communication between industry and government.

The SBA takes the general position that a procuring agency does not need to document in a contract file any other prospective sources if the agency selects an 8(a) participant to perform the requirement, offers it to SBA, and SBA accepts the requirement into the 8(a) program. SBA officials note that it is the procuring agency’s responsibility to conduct market research to determine whether the requirements of the Small Business Act can be met, and then to determine the appropriate contracting vehicle to use. However, SBA considers market research requirements to be satisfied when a participant in the 8(a) program self-markets its abilities to a procuring agency and is subsequently offered a sole source 8(a) requirement. When we discussed this issue with procurement policy officials at DHS, they said that, while these activities may meet the regulatory requirements, in practice they like to see additional market research so that the offer to the 8(a) firm has a more solid basis. {Emphasis added}

Get it off one’s desk seems to be the prevailing attitude, along with the closing down of accepting any new requirements to handle the end-of-year rush to get dollars out the door. Is it just simple correlation that more procurement activity carries more risk of protest? If so, then something has gone wrong.

To improve competition and get meaningful best value outcomes, communication with potential vendors is an essential part of the market research process. Common forms include written exchanges of information (e.g., submission of marketing materials or responses to Requests for Information), in addition to also meetings with potential vendors.

However, it is the risk aversion and untrained contracting officials, combined with poor integration with program management and contracting that often makes this process difficult. A recent article in Government Procurement magazine shared a similar sentiment:

This concern can have a chilling effect on communication with vendors. In response to a request for a meeting prior to release of an RFP, one state official recently wrote: “If I meet with them even as an introductory meeting, then I assume they understand they will be precluded from bidding on any project we bid out the next six months.” Is this level of concern by state and local officials warranted? We think clearly it is not.

Nor do I. In fact, Federal Acquisition Regulation (FAR) Part 15, “Contracting by Negotiation,” balances the dual goals of “openness” and “integrity” in the procurement process by specifically encouraging pre-RFP meetings and exchanges of information between public officials and potential vendors. Good acquisition planning needs open communications, not to mention the FAR specifically identifies “one-on-one meetings” as an appropriate means of accomplishing these exchanges. Program Managers needs to ensure they know what is appropriate, and Contracting Officers need to provide this guidance and act as business advisors in this process. Simple processes to help alleviate end-of-year fiascos before they happen.

What really are the goals here? Openness, transparency, and fairness for starters. Procurement official must treat all potential vendors impartially and provide equal access to all. This ensures the process is fair. For these reasons, I believe initiatives like the Better Buy Project are an important tool to meet these procurement goals, since crowd sourcing is the foundation for access to all, along with Acquisition 2.0 tools that continue to provide the transparency and openness required of the contracting process.

An informed understanding of current industry capabilities and practices results in both better RFPs and better contracts, since industry will have participated in requirements development to ensure fairness, but also realistic objectives and schedules to also help ensure positive outcomes.

More communication with industry promotes more competition, better solutions and better pricing. Ambiguity in the final RFP translates to misaligned solutions or risk for a vendor who responds with higher pricing. The latest developments, especially in such complex fields as information technology, healthcare and environmental sciences, are difficult to harness unless you put industry competitors to work for you.

Let’s capture innovation and stop reinventing the wheel, as I too believe it is ridiculous to think that government officials are so easily manipulated or influenced with these approaches that communications and Acquisition 2.0 initiatives will rig procurements. It is risk aversion and the lack of accountability indicative in the procurement process that acts as barriers to success. Continued advancements through Acquisition 2.0 pilots will hopefully not only demonstrate the potential of openness and transparency, but also provide guidance on transforming the way government does business and allow for accountability to the taxpayer, which should be the ultimate goal.

4 comments:

Right off the bat you have to address the concern about the costs of making the process more "transparent." Look at the hue and cry over making more contract details public for publicly funded work -- complaints come from government as well as the private sector.

Any initiative should have a corresponding business case to justify a expenditure of funds. This of course includes costs versus benefits. What are the costs of doing nothing? I believe significant savings can be realized by increasing efficiency through collaboration, although I am not a proponent of some who advocate reinventing the wheel in the name of transparency.

Transparency is certainly a tool in hopes of finding redundancies, but it takes effective management and strategic analysis to uncover the real waste. I believe the term "transparency" is being approached as a data issue, when it is really a more holistic approach to better government management.

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About Me

Mr. Gracia is President and CEO of Seville Government Consulting. He is an experienced consultant in government contracting and procurement processes, focusing on small business and government clients. He has 20 years of professional experience providing consulting support for the acquisition, training, and management of services and technology in the government and commercial sector including numerous DoD and Federal civilian agencies. He is a Navy veteran, actively supporting military organizations such as the USO, Soldier's Angels, and serving as CFO for Cigars for Warriors.